Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of InnovAge Holding Corp. (NASDAQ:INNV).
Is InnovAge Holding Corp. (NASDAQ:INNV) a buy here? Hedge funds were becoming more confident. The number of bullish hedge fund positions advanced by 32 lately. InnovAge Holding Corp. (NASDAQ:INNV) was in 32 hedge funds’ portfolios at the end of March. Our calculations also showed that INNV isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to view the new hedge fund action surrounding InnovAge Holding Corp. (NASDAQ:INNV).
Do Hedge Funds Think INNV Is A Good Stock To Buy Now?
At Q1’s end, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 32 from the previous quarter. On the other hand, there were a total of 0 hedge funds with a bullish position in INNV a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Maverick Capital held the most valuable stake in InnovAge Holding Corp. (NASDAQ:INNV), which was worth $22.1 million at the end of the fourth quarter. On the second spot was Redmile Group which amassed $21.9 million worth of shares. Camber Capital Management, Citadel Investment Group, and Sectoral Asset Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Courage Capital allocated the biggest weight to InnovAge Holding Corp. (NASDAQ:INNV), around 4.75% of its 13F portfolio. Sectoral Asset Management is also relatively very bullish on the stock, dishing out 0.94 percent of its 13F equity portfolio to INNV.
As one would reasonably expect, specific money managers have been driving this bullishness. Maverick Capital, managed by Lee Ainslie, established the most outsized position in InnovAge Holding Corp. (NASDAQ:INNV). Maverick Capital had $22.1 million invested in the company at the end of the quarter. Jeremy Green’s Redmile Group also made a $21.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Stephen DuBois’s Camber Capital Management, Ken Griffin’s Citadel Investment Group, and Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management.
Let’s now review hedge fund activity in other stocks similar to InnovAge Holding Corp. (NASDAQ:INNV). We will take a look at Weingarten Realty Investors (NYSE:WRI), PDC Energy Inc (NASDAQ:PDCE), ABM Industries, Inc. (NYSE:ABM), Copa Holdings, S.A. (NYSE:CPA), 3D Systems Corporation (NYSE:DDD), Visteon Corp (NASDAQ:VC), and Instil Bio, Inc. (NASDAQ:TIL). All of these stocks’ market caps match INNV’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.6 hedge funds with bullish positions and the average amount invested in these stocks was $291 million. That figure was $191 million in INNV’s case. PDC Energy Inc (NASDAQ:PDCE) is the most popular stock in this table. On the other hand Weingarten Realty Investors (NYSE:WRI) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks InnovAge Holding Corp. (NASDAQ:INNV) is more popular among hedge funds. Our overall hedge fund sentiment score for INNV is 90. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 22.8% in 2021 through July 2nd and still beat the market by 6 percentage points. Unfortunately INNV wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on INNV were disappointed as the stock returned -16.3% since the end of the first quarter (through 7/2) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.